News

Vancouver, B.C. – Wellness Lifestyles Inc. (TSX.V: WELL) (the “Company” or “WELL”), formerly Movarie Capital Ltd. (TSX.V: MOV), is pleased to announce that it has completed an over-subscribed private placement of 8,524,666 units (each, a “Unit”) to raise total gross proceeds of $1,278,700.10 (the “Private Placement”). Also, the Company is pleased to announce that today it has completed the previously announced fundamental acquisition of all of the issued and outstanding securities of Canada Yoga Inc. (“CYI”) and the business of CYI (the “Transaction”) pursuant to the terms of the Amalgamation Agreement dated March 8, 2017 and amended May 9, 2017 (the “Agreement”) among the Company, CYI and 1109983 B.C. Ltd. (“Newco”), a wholly-owned subsidiary of the Company.

The Company which now owns the businesses of CYI and Shakti Yoga Apparel LLC intends to carry on both business and to conduct additional non-yoga related acquisitions in the health and wellness space with a view to developing a synergistic portfolio of brands, products, and businesses that drive maximum shareholder value. The directors of the Company have extensive and highly successful track records on merger and acquisition transactions.

“We’re very pleased to finalize our acquisition of CYI and to concurrently complete a successful oversubscribed offering” said Alex Read, CEO of the Company. “The response to our vision for Wellness Lifestyles has been very encouraging and we look forward to our efforts to enhance shareholder value”.

Private Placement

Each Unit subscribed for pursuant to the Private Placement is comprised of one common share of WELL (a “WELL Share”) and one-half of one common share purchase warrant (each whole warrant, a “PP Warrant”), with each PP Warrant being exercisable into one additional WELL Share at an exercise price of $0.25 until June 13, 2019. In the event that the WELL Shares have a closing price on the TSX Venture Exchange (“TSXV”) (or such other exchange on which the WELL Shares may be traded at such time) of greater than $0.50 per WELL Share for a period of 30 consecutive trading days at any time after four months and one day from the closing of the Private Placement, the Company may accelerate the expiry date of the Warrants by giving notice to the holders thereof and, in such case, the PP Warrants will expire on the 30th day after the date on which such notice is given to the holder by the Company. In connection with the private placement, finders were paid aggregate cash commissions of $83,191.50 and issued 542,989 warrants to purchase WELL Shares (the “Finder’s Warrants”). Each Finder’s Warrant is exercisable into one additional WELL Share at an exercise price of $0.15 until June 13, 2019. The securities issued pursuant to the Private Placement are subject to a hold period under applicable Canadian securities laws expiring October 14, 2017.

The funds raised pursuant to the Private Placement and the bridge financing which closed on May 15, 2017 are expected to be used by the Company to fund the business of the Company and CYI following completion of the Transaction, to identify complementary M&A opportunities, repay certain residual debts of the Company and CYI that are to be assumed by the amalgamated company pursuant to the Agreement, and for general working capital expenses.

Transaction

In consideration for the acquisition of the outstanding securities of CYI, the Company issued an aggregate of 19,649,993 WELL Shares at a deemed price of $0.15 per WELL Share to former shareholders of CYI and others and an aggregate of 277,574 non-transferable common share purchase warrants (the “Transaction Warrants”) to former warrant holders of CYI. Each Transaction Warrant is exercisable into one additional WELL Share at an exercise price of $0.36 until April 11, 2019, subject to adjustment. In addition, a total of 600,000 WELL Shares at a deemed price of $0.15 per WELL Share were issued to two finders as finder’s fees in connection with the Transaction. The securities issued pursuant to the Transaction are not subject to any hold periods.

Following completion of the Transaction, there are 40,774,375 WELL Shares issued and outstanding on an undiluted basis of which approximately 27% is held by shareholders who were shareholders of the Company prior to the Transaction, approximately 48.5% is held by former CYI shareholders and others receiving consideration pursuant to the Transaction, approximately 23% is held by subscribers pursuant to the bridge financing and Private Placement, and approximately 1.5% is held by finders.

On completion of the Transaction, Hamed Shahbazi, a director of the Company, holds directly and indirectly through Impactreneur Capital Corp., a company controlled by him, an aggregate of 8,054,208 WELL Shares (of which 6,955,541 WELL Shares having an total deemed value of approximately $1,043,331 were acquired pursuant to the Transaction in exchange for the 10,023,345 CYI Shares previously held by Mr. Shahbazi and Impactreneur Capital Corp.) and 500,000 common share purchase warrants representing approximately 19.75% of the total issued and outstanding WELL Shares on an undiluted basis (compared to approximately 8.3% held prior to closing of the Transaction on an undiluted basis) and approximately 17.01% of the total issued and outstanding WELL Shares on a fully diluted basis (compared to approximately 11.2% held prior to the closing of the Transaction on a fully-diluted basis). These shares were acquired for investment purposes in connection with the Transaction, and Mr. Shahbazi has no current intention to acquire control or direction over additional securities of the Company as at the date of this news release.

As Mr. Shahbazi is a director of the Company, the issuance of securities to him and Impactreneur Capital Corp. pursuant to the Transaction is considered a Related Party Transaction under Policy 5.9 of the TSX Venture Exchange, which incorporates by reference Multilateral Instrument 61-101 Protection of Minority Security Holders in Special Transactions (“MI 61-101”). The issuance of these WELL Shares pursuant to the Transaction is exempt from the formal valuation requirements at Section 5.4 of MI 61-101 and the minority approval requirements at section 5.6 of MI 61-101 because the WELL Shares are not listed on any of the markets specified at paragraph 5.5(b) of MI 61-101 and because the requirements of paragraph 5.7(b) of MI 61-101 are met.

Grant of Stock Options

Further to the Company’s news release dated May 15, 2017, in connection with the Transaction, the Company has granted 407,744 stock options to Gravitas Securities Inc. pursuant to its advisory agreement with the Company. Each option is exercisable into one WELL Share at an exercise price of $0.25 until June 15, 2022, with the options vesting as to 25% on the grant date, 25% on the first anniversary of the grant date, 25% on the second anniversary of the grant date and 25% on the third anniversary of the grant date.

Resumption of Trading

Trading of the WELL Shares was halted on December 6, 2016 by the TSXV in connection with the announcement of the Transaction. Trading in the WELL Shares is expected to resume on the TSXV when markets open on June 16, 2017.

For additional information on the Transaction and financings, see the Company’s news releases dated December 6, 2016, March 10, 2017, May 15, 2017, and June 1, 2017 and the Company’s Disclosure Document dated March 10, 2017, all of which are available on SEDAR at www.sedar.com under the Company’s profile.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Disclaimer for Forward-Looking Information

Certain statements in this news release related to the Company are forward-looking statements and are prospective in nature. Forward-looking statements are not based on historical facts, but rather on current expectations and projections about future events, and are therefore subject to risks and uncertainties which could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements. These statements generally can be identified by the use of forward-looking words such as “may”, “should”, “will”, “could”, “intend”, “estimate”, “plan”, “anticipate”, “expect”, “believe” or “continue”, or the negative thereof or similar variations. Forward-looking statements in this news release include statements regarding the business of the Company and intended use of funds raised pursuant to the Private Placement and bridge financing. Such statements are qualified in their entirety by the inherent risks and uncertainties surrounding the Company’s ability to carry on tits business as described and such other factors beyond the control of the Company. Such forward-looking statements should therefore be construed in light of such factors, and the Company is not under any obligation, and expressly disclaims any intention or obligation, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.